Federal officials are discussing changes to how the government releases sensitive economic data, seeking to bring the system in line with fast-moving financial markets.

While the talks are preliminary, officials are driven by their growing concern about leaks and their unease that high-speed trading firms can trade on market-moving numbers before other investors, say people familiar with the discussions.

The talks have covered a number of options, including eliminating the current system, which releases data via embargoed news releases to the media; building a single, technologically secure facility for all government agencies to use to distribute data; and publishing economic data directly on the Internet.

The discussions are among the first steps toward what could be the most comprehensive change in a generation to how the federal government sends data, such as the unemployment rate, productivity numbers and other indicators of the economy's performance to the public and Wall Street. The Wall Street Journal, in a series of Page One articles, has examined leaks of sensitive government data.

The deliberations have included senior White House economic advisers and officials from several government departments.

Questions about how to release economic data will continue to receive attention in the administration, said Jason Furman, chairman of the White House's Council of Economic Advisers. "It's an important issue to think about," he said. "But we're always thinking about how to improve it."

Nixing the entire system is a controversial idea. An administration official said the White House, for one, isn't discussing such a step. Other officials said departments should have the flexibility to set up the best procedures for each different piece of information.

Ahead of any comprehensive plan, individual departments are moving ahead.

The Commerce Department is upgrading its media room, adding new security mechanisms to make sure its economic reports aren't leaked. Officials at the Federal Reserve plan to change how it releases market-moving data, statements and speeches. The Labor Department made changes to its security systems last year and is considering making more.

At issue is the traditional way that the government releases economic data. Under a system known as a lockup, many government departments give economic data to reporters on an embargoed basis. The reporters have a defined period to write their reports. When the embargo is lifted, reporters are allowed to publish. The idea is to give reporters time to digest complex economic reports and produce accurate accounts.

The system of lockups has come under fire in recent years after several media firms, including Dow Jones & Co., publisher of The Wall Street Journal, started using the lockup to sell raw data from the government reports to high-frequency trading firms. That data, sent along high-speed transmission lines, allows firms to make computerized trades before individual traders can react.

Dow Jones has said it "always endeavors to follow all lockup procedures and rules, and would never sanction—and is not aware of—any intentional violations."

In one snafu that highlighted the loose security surrounding the data, an official at the Federal Reserve mistakenly sent details of a regular Fed meeting to a group of people, including investors, a full day before the minutes were scheduled to be released to the public.

The Fed has said the release was a mistake and internal investigators later said the incident highlights the need for the Fed to strengthen controls over the minutes of its board meetings.

The Securities and Exchange Commission and other law-enforcement agencies have opened several investigations into whether media firms or traders have broken insider-trading rules by getting access to the data before it is formally released, according to people familiar with the investigations.

Last year, the Labor Department refurbished its lockup room and installed new electronic equipment in an attempt to make it more difficult for computer-based trading firms to jump ahead of other investors and profit from the data. It also took the unusual step of banning several media firms it didn't consider to be primarily journalistic operations.

An official at the Labor Department said that the agency is "always trying to make the release of information to the public more transparent and timelier."

The Commerce Department is in the process of building a new lockup room it hopes will be more secure than the Labor Department. Commerce officials have acquired new space within the agency that will, for instance, make it more difficult for wireless signals to penetrate the walls.

The department earlier this year hoped to have its lockup room ready by January, but the target has slipped because of construction delays, according to people involved.

While the Commerce Department's media room has been closed, the department has borrowed the lockup room at the Labor Department to release its economic data, such as the quarterly economic growth.

"Our goal is to have the [Commerce Department's] lockup facility reflect the best industry standards for a modern press lockup facility," said Jane Callen, a press official who manages the lockups at the department.

"The system of lockups has come under fire in recent years after several media firms, including Dow Jones & Co., publisher of The Wall Street Journal, started using the lockup to sell raw data from the government reports to high-frequency trading firms. That data, sent along high-speed transmission lines, allows firms to make computerized trades before individual traders can react.

Dow Jones has said it "always endeavors to follow all lockup procedures and rules, and would never sanction—and is not aware of—any intentional violations.""

I thought the intention of the lock up was to give writers the chance to study documents and write prompt articles. I thought it was also to allow the release of info to all parties at exactly the same time. How can Dow Jones say they weren't aware of violations when they were selling the data using high speed transmission lines to their select clients?

By releasing data to the world at large at the same time, it would put the journalists in competition with each other in terms of who analyzes the data fastest and most correctly. The most talented win. Is not that how free market is supposed to work? The way it currently is, it gives journalists all kinds of time to analyze the data and the one who gets the answer first has no advantage over the one who takes a lot longer because they ALL have to wait until the starter's gun to come out with their reports and recommendations.

Government lock boxes perform an interesting function. It enables the executive branch of government through its Ministry of Truth to withhold sensitive data so that its Bureau of Agitprop can flood the media with disinformation.

What about holding all data and releasing it all at the same time one day per month. The confusion factor alone would be enough to slow things down. Might make it more important for actual people to interpret the data and make decisions.

It does sound like they should eliminate these lockups. Even if one is not able to act on new data, actually buying or selling until the embargo is lifted, it matters that you get think about what it means before anyone else has seen it.

It's a naive invitation to bad behavior to release this economic data selectively, even if it is to members of press, expecting it won't leak to the highest bidders. So what if the initial news reports only contain raw numbers, no interpretation until they, like us, have had a chance to figure out what it means. Everyone should be able to get government economic data on the same terms at the same time.

More control over all information would suit this administration just fine. Keep that in mind. They gather it and they control it -- what's wrong with that picture in a free and open, enterprise system?

I'm getting a little tired of the old saw being passed around that those with access to high speed networks have an "unfair" advantage. It is BS. There is an advantage. The access is paid for.

Life is not "fair". It were, as some of the usual suspects desired, then I would not be able pay first class on an airline for service better than those in the back of the plane on a $99 discount ticket.

There is a cost to perferred access to many things in life, and tbe malcontents need to either pay up, or shut up and suck it up.

> What about holding all data and releasing it all at the same time one day per month.

Oh, great. We've spent taxpayer dollars collecting data that's so valuable and so time-sensitive that people will pay big $$$ to get it a few milliseconds sooner. But under your plan, some of it will have been just sitting there (deliberately!) for up to 30 days before anyone sees it and can do anything with it.

And how would this change the problem anyway except to create an even more enormous invitation to bad behavior at news organizations that get early access?

The taxpayers foot the bill for generating the data, the news media outlets (likely) receive the data for free, and then, allegedly, make a quick buck by providing the data to high speed traders ahead of the official release. As long as the traders pay someone something for the data, the malcontents (i.e. taxpayers) should just suck it up (and trust the Wisdom of Wall Street). Right on Mr. Dugas.

The issue for the Obama administration might be "unfairness," but to me it's just a question whether giving the big guys first dibs on bargain priced stocks makes for a more efficient market, or a less efficient market. Your average investor is fleeing from the stock market, and it's primarily because of the realization that it's stacked against him. If you want to attract his investment, then you've got to give him a fighting chance to make a profit. All of the excuses or rationalizations in the world for not doing so are not going to be persuasive if the goal is to attract his investment.

Inside information is information not generally available to the public that is important enough to move the price of a stock or stocks. It has been illegal for decades. It is one thing to pay for analysis of data that can lead to superior returns. That is not the case here. Those buying are paying for access to raw data that was collected at taxpayer expense, and those selling are benefitting due exclusively to their access granted by the government with the stipulation that it not be released until a specific time. Given the willingness of buyers to pay money for the raw data on the expectation that they receive it before others, they obviously expect to get a unique benefit. This certainly sounds like transacting on inside information to me . I find it difficult to understand what the government does not go after both buyer and seller.

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